1998: Will Berkshire repurchase shares?

AUDIENCE MEMBER: Good morning. I’m Murray Cass from Markham, Ontario.

First off, against my dentist’s advice, I’d like to thank you for the free Coke and ice cream last night. (Laughter)

Earlier this morning, Mr. Buffett, you mentioned that you liked when wonderful companies like Coke purchased their shares back.

Similarly, I own shares in a wonderful company, that’s Berkshire. Should I be hoping that you buy your own shares back?

WARREN BUFFETT: Well, it’s interesting, we should have — perhaps we should have bought some shares back, but usually at the time we could have bought something else that also did very well for us.

I mean maybe when we were buying Coke we could have been buying our own shares back. To some extent there hasn’t been that much trading in it.

But I think it’s a valid criticism to say that we have missed the boat at various times in not repurchasing shares.

We’ll see what we do in the future on it. If it looks like the best thing to do with money, it’s what we should be doing.

And in the past, I’ve probably been not optimistic enough in respect to Berkshire compared to other things we were doing with money.

Now, the money we spent buying the GEICOs and all of that has turned out to be a good use of money, too.

But we’ve never wanted to leverage up. That’s just not our game. So we’ve never wanted to borrow a lot of money to repurchase shares. We might advise other people to do it, but we would — it’s not our style ourselves.

We’ve got all our money in the company. We’ve got all of our friends’ and our relatives’ money virtually.

So we have never felt that we wanted to leverage up this company like it was just one of a portfolio of a hundred stocks.

But it’s a valid criticism to say that we have not repurchased shares when we should have. And it’s also a valid criticism to say that we’ve issued some shares we shouldn’t have issued.

Charlie?

CHARLIE MUNGER: Oh, I would agree with both comments.